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Export Control Regulations

Colorado School of MinesOffice of Research Administration

Ralph Brown

With thanks to the University of Colorado at Boulder and the University of Maryland from whom much of this material was adapted

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What are Export Controls?

US laws that regulate the distribution to foreign nationals and foreign countries of strategically important products, services and information for reasons of foreign policy and national security.

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US Export Controls and Responsible Agencies

State Department: Inherently military technologies--International Traffic in Arms Regulations (ITAR) Commerce Department: “Dual-Use” technologies -- Export Administration Regulations (EAR)Treasury Department, Office of Foreign Assets Control (OFAC): Prohibits transactions with countries subject to boycotts, trade sanctions, embargoes

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Implications of Export Laws

No effect on 90% of CSM researchBut potential impact on Ability of foreign students to participate in

research involving a controlled technology (mostly under ITAR)

Ability to provide services (including training in the use of controlled equipment) to foreign nationals (ITAR, EAR, OFAC)

Ability to send controlled equipment to foreign countries (ITAR, EAR, and OFAC)

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Dissemination of Information

Laws prohibit the disclosure without a license from Commerce or State of controlled technical information to a foreign national in the U.S. or abroad.Methods of disclosure include

Fax Telephone discussions E-mail communications Computer data disclosure Face-to-face discussions Training sessions Tours which involve visual inspections

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License Requirement for Dissemination of Information

Does Not Apply If

One of 3 exclusions applies: Education Exclusion (ITAR, EAR) Fundamental Research Exclusion (ITAR,

EAR) Employment Exclusion (ITAR only)

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Education Exclusion No license is required to share with foreign

nationals “information concerning general scientific, mathematical or engineering principles commonly taught in universities or information in the public domain”

Students using controlled equipment to conduct research should be registered for a research credit class * This strategy is being criticized by government.

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Fundamental Research Exclusion

No license is required to disclose to foreign nationals information which is “published and which is generally accessible or available to the public [through, for example] fundamental research in science and engineering at universities where the resulting information is ordinarily published and shared broadly in the scientific community.”

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The Fundamental Research Exclusion is Destroyed if

CSM accepts a contract clause that:– Forbids the participation of foreign nationals;

– Gives the sponsor a right to approve publications resulting from the research; or

– Otherwise operates to restrict participation in research and/or access to and disclosure of research results

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Fundamental Research Exclusion Violation

“Side deals” between a PI and Sponsor may destroy the Fundamental Research Exclusion.

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CSM Strategy

Protect fundamental research exclusion by eliminating contractual clauses that destroy our ability to claim the exclusion

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Employment ExclusionNo license is required to share controlled technical data with a foreign national who Is not a national of certain countries; Is a full-time, bona fide CSM employee; Has a permanent address in the US while

employed; Is advised in writing not to share

controlled data with any foreign nationals.

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Providing Services to Foreign Nationals

ITAR and EAR prohibit assisting & training foreign nationals in the US or abroad in the design, development, use, testing, etc. of controlled equipment without a license from Commerce or State

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No ExclusionsThere are no clear exclusions or safe harbors from the requirement to obtain a license for foreign nationals to use controlled equipment, however….The University maintains that the Education Exclusion applies if the student uses the equipment as part of a program of instruction* Position not endorsed by government

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License requirement to ship controlled equipment out of

USA license is required to ship equipment controlled by ITAR to any foreign countryThere are few exclusions or exceptionsIt can take months to obtain a license from State. Notify ORA as early as possible.

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Shipping Equipment Cont’d

A license may be required to ship equipment out of the US under the EAR depending on whether the equipment is controlled, where it is being sent and whether an exception applies.NOTE: A license may be required to ship software out of the US!The process to classify equipment under the EAR is very tedious, detailed and time consuming. Contact ORA early!

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Shipping Equipment Cont’dState will generally not issue a license to authorize shipping controlled equipment or providing services to terrorist supporting countries: Cuba, Iran, Iraq, Libya, Syria, Sudan, North Korea

There is a presumption under OFAC laws that shipments of equipment and provision of services to boycotted countries are ILLEGAL- Cuba, Iran, Iraq, Libya, Liberia, Sudan, North Korea.

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Laptop ExceptionExcluding embargoed countries, faculty who wish to take their laptops out of the country to use in a university project that qualifies as fundamental research may be able to do so under the license exception for temporary export (TMP) if the laptop meets the requirement for "tools of trade"  and is under control of the CSM faculty member (15 CFR Part 740.9).

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Providing Services Under OFAC

OFAC prohibits the provision of services to countries subject to US sanction programs, boycotts, etc. w/o a licenseTypes of prohibited services: Conducting surveys and interviews Providing marketing and business services Creating new information materials at the

behest of persons in a boycotted country

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Providing Services Cont’d

Types of prohibited services: Engaging the services of persons in a

boycotted country to develop new information materials. This includes “collaborative interactions” between US authors and authors in a boycotted country that result in co-authored materials or their equivalent.

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OFAC Boycott Targets

Cuba, Iran, Iraq, Libya, Liberia, Sudan, North KoreaSpecific entities and persons in the Balkans, Burma, Ivory Coast & Zimbabwe involved in terrorism, diamond trade, drug trafficking, anti nonproliferation activitiesBoycotts change: Check OFAC website: http://www.treas.gov/offices/enforcement/ofac/programs/index.shtml for current information

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Peer Review and Editing Services

In April 2004, OFAC reversed its earlier position on peer review and editing services to allow:Peer review by US persons of scholarly articles authored by persons in boycotted countries and style and copy editing if these activities do not result in substantive alterations or enhancements to the manuscripts

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Administrative Penalties

Termination of export privileges (EAR and ITARSuspension and/or debarment from government contracting (EAR and ITAR)Voluntary disclosure of violations may serve as a “mitigating factor” in deciding penalties

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Penalties for EAR Violations

Criminal (willful violations): Up to $1 million for the University or

company Up to $250K per violation for individuals and/or up to 10 years in prison

Civil Up to $12k per violation for individuals

and the University/corporations

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Penalties for ITAR Violations

Criminal (willful violations) Up to $1 million for the University or

company Up to $1 million per violation for individuals and/or up to 10 years in prison

Civil violations: Up to $500k per violation for individuals and the University or company

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Penalties for OFAC violationsCriminal (willful) violations: Fine of no more than $1m for

companies Fine of no more than $100k for

individuals (including corporate officers) and/or 10 years imprisonment

Civil penalties: Fine up to $55k for each violation by

any person

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Proposal Stage Red Flag Items

Is the RFP marked “Export Controlled”? Is the sponsor demanding pre-approval

rights over publications or barring the participation of foreign national students ?

Does the Project involve: • Shipping equipment to a foreign country?• Collaborating with foreign colleagues in foreign

countries?• Training foreign nationals in using equipment?• Working with persons in a boycotted country?• Working with persons in a terrorist country?

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If you answer yes…A determination must be made regarding possible license requirements - Contact Ralph Brown in ORA

Note 1: If license is needed it takes much time and effort of faculty and can be months in process.

Note 2: These laws apply to all activities – not just sponsored projects

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Remember

PROTECT THE FUNDAMENTAL RESEARCH EXCLUSION!– No restricted clauses for publication – No side deals

CONTACT ORA AS SOON AS AN EQUIPMENT ISSUE ARISES

Questions? contact Ralph Brown (ORA) at 3538 Ralph.Brown@is.mines.edu